The Dubai property market is currently experiencing a shift, with new trends emerging as supply increases and buyers gain more power over sellers.

For the first time in years, property buyers in the UAE seem to have the upper hand. Recent data shows a drop in prices, signalling a market where developers and sellers are willing to lower their prices. In the past, developers used incentives like high commissions to attract buyers, but even these efforts couldn't prevent the decline in some market sectors, especially in off-plan sales.

While some commentators argue that this price drop is a temporary trend or that the data needs to be reconsidered, the reality is that prices have been falling for months in several areas. This price shift is largely driven by a growing supply of homes. With over 300,000 units expected to be delivered in the next four years, there are now more homes on the market than at any point in the last six years, even when adjusting for expected delivery rates.

Developers Turn to Joint Ventures and Discounts

With lower competition and less urgency in the market, bidding wars are becoming less common. Developers are adapting by forming joint ventures with land banks to manage cash flow and offering larger discounts for upfront payments—strategies not seen in recent years.

As a result, properties are sitting on the market longer, with time on the market at its highest since February 2020. This shift is part of a global trend, seen in places like the US, where home sales have fallen despite low supply levels.

In Dubai, land prices have dropped for the first time, signaling a market correction. While some point to supply chain issues, the fact remains that prices had begun to exceed their actual replacement value. This imbalance, particularly between off-plan and ready properties, is now starting to correct.

Buyers Gain the Upper Hand in Refurbishment and Ready Homes

In the refurbishment market, buyers are increasingly able to negotiate lower prices. Deals are falling through more often as buyers now have the power to walk away from inflated prices and choose sellers who are offering more realistic pricing.

The growing supply of new homes has made it possible to meet more than a year’s worth of demand, the highest level seen since the 2014 boom-bust cycle. For retail buyers, this means more options and better affordability. In areas like Jumeirah Lake Towers (JLT), the median price for ready homes is Dh1,530 per square foot, while off-plan homes are priced at Dh2,370. The pricing gap is even wider in places like the DubaiLand Residential Complex.

Investors and Speculators Adjust to the New Market

For investors and speculators, the market is presenting new challenges. The financial risks associated with off-plan investments are becoming more apparent, as prices are adjusting to reflect the true value of properties. While some investors may have misjudged the market in the past, experienced buyers know that property cycles are inevitable and are now preparing for the next stage.

The Dubai property market is entering a new phase, with an increasing supply of homes, lower prices, and more power for buyers. This shift is reshaping the landscape, offering better opportunities for retail buyers and investors who are ready to adapt.

Source: Gulf News